Top 10 States with Favorable Tax Policies in the U.S.

July. 16,2025

Discover the top ten states in the U.S. with the most favorable tax policies, including no income taxes, low property and sales taxes, and business-friendly environments. Perfect for those considering relocation, this guide highlights states like Wyoming, Alaska, Florida, and Nevada that offer significant financial advantages. Understanding these tax-friendly states can help optimize your earnings and savings while minimizing tax burdens.

Top 10 States with Favorable Tax Policies in the U.S.

Top 10 States with Favorable Tax Policies in the U.S.

While federal taxes are consistent across the nation, state-specific taxes vary significantly. Some states levy minimal taxes, making them attractive for residents, while others impose higher rates. Understanding which states are more tax-friendly is crucial, especially if you're considering relocating, as taxes directly affect your financial well-being. This guide highlights the top ten states with the most advantageous tax environments, emphasizing states with no income tax, low sales and property taxes, and other favorable financial policies.

  • Wyoming: No income tax, below-average gas taxes, and the lowest beer tax. Property taxes rank ninth lowest nationwide.
Top Tax-Friendly States
  • Alaska: No income or gas tax, with an average sales tax of 1.76%. Residents receive a Permanent Dividend Fund annually after residency.
  • South Dakota: No income tax, lower sales taxes, and exempt sales tax on prescription drugs, supporting healthcare expenses.
  • Florida: No income tax, low property taxes averaging around $1,700, and excemptions on food and medicine from sales tax.
  • Nevada: No income tax, low property taxes at about $1,500, and minimal gas taxes at 34 cents per gallon. Goods like food and medicine are tax-exempt.
  • North Dakota: Progressive income tax rate starting at 1.10% for incomes below $100,000. Farm machinery is taxed at only 3%, and essentials are tax-free.
  • Delaware: Minimal gas taxes and no sales tax on products or services. Property taxes are among the lowest, making it a business-friendly environment despite higher income taxes.
  • Arizona: Exempt from income tax if earning under $152,000, with low property taxes around $1,356 and gas taxes at 19 cents per gallon.
  • Louisiana: Lower combined property and gas taxes, with a 6% income tax above $50,000 earnings. State taxes favor higher earners.
  • Mississippi: Gas taxes at 19 cents per gallon and property taxes averaging $813. Income tax rates are eased to balance high sales taxes.